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Kravis lobbies on Capital Hill to thwart buyout tax bill

Henry R. Kravis, the billionaire founder of the corporate buyout movement, has been involved in hectic lobbying on Capitol Hill, hoping to kill legislation that would raise his taxes and those of other investment fund executives.

The buyout titan met two weeks ago with Representative Sander M. Levin - a senior Democrat who is proposing to more than double the amount of tax that the industry now pays - and mustered his best arguments. Kravis said that firms like Kohlberg Kravis Roberts play a central role in the US economy, citing the example of how his firm had produced many jobs in Levinâ€™s home state when it turned around a troubled electricity company in Michigan. He asserted that an increase in tax rates would harm American competitiveness abroad.

In recent weeks, lawmakers have had visits from industry leaders including Blackstone chief Stephen A. Schwartzman and David M. Rubenstein, a senior executive and co-founder of the Carlyle Group.

Meanwhile, the Private Equity Council, the industryâ€™s trade body in Washington, issued its first study of buyout firms, describing them as â€œneither a dark force nor a silver bulletâ€? for the economy.

â€œThe role private equity firms play in improving the performance of companies of all kinds in all sectors increases productivity and competitiveness,â€? the PECâ€™s discussion paper says.